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Advantages and Disadvantages of Renting or Owning a Home

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... buyer has changed with many single people as well as families purchasing homes. ... You are not investing it in a home's value ... – PowerPoint PPT presentation

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Title: Advantages and Disadvantages of Renting or Owning a Home


1
Advantages and Disadvantages of Renting or
Owning a Home
2
Introduction
  • Background
  • Throughout the United States for generations it
    was typical for a couple to marry and then plan
    the purchase of their house. Today the face of
    the buyer has changed with many single people as
    well as families purchasing homes.
  • Problem
  • Deciding when it is the best time - to buy a
    home, financially is crucial.
  • Purpose
  • Explore the benefits of buying a home rather than
    renting.
  • Scope
  • Examine the advantages and disadvantages of
    renting and buying a home while considering an
    individuals life style, goals and financial
    means.

3
Advantages to renting
  • Level of freedom - a lease expires usually after
    one year and the renter is free to move on to
    another location with no penalty or loss
  • Very little maintenance - more free time is
    available to pursue other interests
  • Up-front cash - dramatically less than is
    necessary in the purchase of a home

4
Disadvantages to renting
  • Throwing money away - which you will never see
    any kind of return. You are not investing it in a
    homes value
  • Ability to decorate and personalize your living
    space is limited to minimum
  • No tax advantage that the renter can enjoy. Your
    landlord will benefit from any kind of tax break
  • Rent increase - yearly

5
Advantages to owning a home
  • You are making an investment - if you do your
    choosing carefully, this investment will grow
  • Tax benefits - you can deduct your mortgage
    interest and property taxes
  • You can customize your dwelling in any way you
    wish
  • Psychological benefits - a place to truly call
    home
  • Owning your own home has been described as part
    of the American dream for generations

6
Disadvantages to owning a home
  • Your home is an investment and its value or
    equity may go up or stay the same but it may also
    decline. It is somewhat risky
  • If you decide to move, your home must be sold and
    this is a big undertaking
  • Maintenance - that is an ongoing process. Either
    you pay for the maintenance or you do it yourself
    sacrificing much of your free time.
  • A sizeable down payment - is usually required
    when buying home

7
Determining the Best Time to Buy
  • Did you save enough money for a down payment?
  • Is your job likely to transfer you to a new
    location in the next few years?
  • Are you ready to assume the financial
    responsibilities associated with property and
    home ownership?
  • Will the maintenance be too much of a burden to
    you?
  • Have you found an area in which you are
    comfortable?

8
Conclusions
  • We can conclude that the majority of people would
    benefit more from purchasing a home
  • No matter what your status, single, married,
    divorced or just starting out in the workforce,
    it is usually a better option financially, with a
    few exceptions, to buy.

9
Recommendations
  • Keep track of your credit report
  • Spend some time at the home buyer's prep. school
  • Develop a budget
  • Get your financial picture in focus
  • Find ways to save money on your purchases
  • Familiarize yourself with the various terms you
    will hear relating to buying a house
  • Investigate mortgage pre-qualification and
    approval
  • Get mortgage offer comparisons
  • Get a full understating of how agency works when
    working with an Agent
  • Find and choose an Agent
  • Compare housing types to choose the best for
    you Single family, townhouse or condominium
  • Check home listings and prices online
  • Determine the value of a home
  • Compare homeowners insurance

10
Works Cited Bluejay, Michael. How to Buy a
House Consider the Financial Impact of Buying a
House. February 2004. 17 February
2004 .   Dannan,
Nancy. House Home Homeownership for Singles.
18 February 2004 .
  Garton-Good, Julie. The Frugal Homeowners
Guide To Buying, Selling, Improving Your
Home. Chicago Real Estate Education Company,
1999.   Glink, R. Ilyce. 100 Questions Every
First-Time Home Buyer Should Ask. 2nd ed. New
York Three Rivers Press, 2000.   Lank, Edith.
Home Buyers Kit. 4th ed. Chicago Dearborn
Financial Publishing, Inc., 1997.   Mac, Freddie.
New Buyer Rent or Buy? 2004. 18 February
2004 .   Murphy, Kate,
and William Glasgall. The House of Your
Dreams-Pixel by Pixel. Business Week (3594)
7 September 1998 Personal Business   Russell,
Judi. A New Home Is Well Within the Reach of
Many Buyers. New Orleans CityBusiness 17(22)
12 February 1997 Focus Real Estate.
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